2024-10-01 17:34:15
During his general policy speech on Tuesday October 1, Michel Barnier introduced several tax increases for 2025.
Michel Barnier has decided: after several days of speculation, the Prime Minister has put an end to the suspicion. A tax increase will surely occur in 2025. The reason is to deal with the country’s abysmal debt. During his general policy speech that took place on Tuesday October 1, 2024 before the National Assembly, the head of government presented the broad principles of the stabilization of the tax which awaits some families from January 1. Be assured because, as promised, there will be no unpleasant surprises for the most modest families or those in the middle: the increase in income tax will not be cumulative. The effort will be focused on the wealthiest.
The state will establish a “unique participation” on the profits of large and very large companies which make significant profits. Furthermore, a “special contribution” will be asked of “the most fortunate French people”. A statement that confirms the current trends, but which does not go into challenging details: the surtax on the profits of large groups and the tripling of the exclusive contribution on high incomes are mentioned in particular.
On the other hand, if Michel Barnier does not talk about it, other areas will be under investigation, such as the tax increase on electricity, on cars or even the tax change for AirBnb rent. The Minister of Finance, Laurent Saint-Martin, will present detailed measures on Wednesday October 9.
19:34 – The rich taxed at 75%?
This is an observation established by Les Echos which can cause a problem. While Michel Barnier wants to increase taxes for the highest incomes, perhaps with an increase in taxes on high incomes, the economic daily notes that the low tax rate of the people affected have already reached 66.2% (45% for income tax, 4% for special contribution on high incomes, 9.7% for CSG-CRDS and 7.5% for unified tax). If the CEHR triples to 9 or 12%, this will increase the margin rate to around 70/75% depending on the home.
18:20 – Why did Michel Barnier not explain the necessary measures?
“Differential contribution”, the amount of which is unknown, on “the most privileged French people”, not knowing from the type of income we are in this category; effort required of “big and big companies” – which one? If Michel Barnier gave the first instructions of the future increase in taxes, he did not go into specifics. It must be said that it is not the place or the time.
In fact, the general policy text only sets the main guidelines of the government and announces the main reforms, without going into details. It is then up to the ministers to define exactly what action the head of government wants. This is why the tax details will be revealed only during the presentation of the budget for 2025 in October.
16:39 – How many French people pay the special contribution on high incomes?
Perhaps it will increase exclusively in 2025, the exclusive contribution on high incomes therefore concerns single people who say more than 250,000 euros per year to the tax authorities and couples who declare more than 500,000 euros per year. According to the old INSEE data from 2015, not updated since, this only corresponds to approximately 0.1% of the richest people in the country.
16:12 – “Targeted, exceptional and temporary” increases
In his speech, Michel Barnier warned that these additional taxes on rich people and companies are not intended to last forever. This is a “resolute, dedicated and temporary effort”, as Maud Bregeon, the government’s spokesperson, already pointed out at midday.
15:27 – Barnier confirms “special contributions” from the richest in 2025
In his general policy speech, Michel Barnier confirmed that the State will put “unique participation” of large and very large companies that make significant profits. In addition, an “exclusive contribution” will be asked of “the most fortunate French people”. These comments, although they have not provided details, nevertheless confirm the trends which have emerged in recent hours and which have already been mentioned in this live broadcast.
15:24 – No all-tax increase
During his general policy speech, Michel Barnier devoted part of his comments to state finances. The Prime Minister has not talked about a general increase in income tax. There are no bad surprises in 2025 for families, although the proposal has been raised in recent days. The amount will not be frozen and the amount to be paid to the tax authorities will not go up.
2:48 pm – MEPs will vote on tax increases on October 29
While the Minister of Finance, Laurent Saint-Martin, will present detailed measures on Wednesday October 9, the debates in the National Assembly will begin on Monday October 21, announced The Parisian. The agents will work until Friday 25 in the “revenue” section, so the demand is increased tax. They should vote on Tuesday 29 to approve or not the measures. Then, the question of spending, and therefore the savings also promised by the government, will be studied from Tuesday November 5.
13:37 – Which companies will be affected by the special tax on large groups?
The government is planning to introduce a special tax of 8.5% on the profits of certain groups. These will be those with a turnover equal to or greater than 1 euro and those that have generated profits. For example, Total Energy will be concerned, as will the production company Studio Canal, the insurer Axa and the energy provider Engie.
11:52 – A second fire-tax about to be implemented
Further down in this live, we talked about a future increase in a tax on electricity. Not one but maybe two taxes will be added to your income. Michel Barnier can actually announce an additional payment on the household wallets. Obviously it’s not presented that way, but the end result will be this. In fact, the State wants to ask EDF (the main electricity supplier) to pay additional taxes on nuclear power plants and hydroelectric dams. Expected income: approximately 3 billion euros per year.
Unless EDF is clearly not going to pay for this out of its own pocket and should pass it on to customers, without their knowledge. In a few months, the cost of electricity alone will drop significantly. The right time to discreetly take care. This increase should be significant but will not prevent the overall price from falling. The state will be the winner and the taxpayer will not know, believing that, in any case, their income will be reduced.
10:33 – The price of cars will rise due to taxes
It is a strong tax measure that Michel Barnier is preparing to announce because it affects the daily lives of millions of French people: the car. The Prime Minister decided to increase the ecotax paid when buying a car. The reason, to promote charging electric cars.
Specifically, on the Peugeot 208 II (the best-selling new car in 2024), an additional tax will have to be paid in 2025 when you buy a hot model (a tax that does not apply with the current law), or in 2027 for a hybrid model. Only the purchase of a 100% electric model exempts you from paying the ecotax.
For a Renault Clio V or a Dacia Sandero 3, the ecotax, which must be paid in advance on purchase, will also increase from January 1. In what amounts? That’s the whole question. The first elements simply indicate that the maximum value for big dirt cars (Audi RS5 for example) will increase by 10,000 euros per year to reach 90,000 euros in 2027.
But for the cars given as an example, the tax is already a few hundred euros, the proportion of the increase is not yet known. Will it still be 6%?
10:07 – How much will this tax increase cost the taxpayers concerned?
This unique contribution on high incomes (CEHR) is paid by singles who declare more than 250,000 euros per year and couples who declare more than 500,000 euros. In addition to the income tax, a tax is imposed on the share of more than 250,000 or 500,000 euros. But how much will this cost the taxpayers concerned?
A person declaring 300,000 euros can, in 2025, pay 4,500 euros under CEHR, compared to 1,500 euros this year, in addition to income tax (and CSG) . For a couple declaring 600,000 euros, the amount will increase from 11,500 to 34,500 euros.
09:37 – Tax on high incomes almost tripled
According to The ParisianMichel Barnier can announce a tripling of the exceptional contribution on high income. Today, people who earn more than 250,000 euros must pay, in addition to income tax, a tax of 3 to 4%. This can be tripled to 9 and 12%. A game which can bring 3 billion euros into the coffers of the Public Treasury.
09:06 – Tax on electricity increased by 50%
The option appears to be on the table. According to Les Echos etc The ParisianTICFE (household energy tax on electricity) may increase from 21 euros to 32 euros at the beginning of 2025. This is a tax that is paid when you pay your electricity bill and send to the State. Emmanuel Macron lowered it to 1 Euro during the energy crisis to keep the increase in the cost of electricity production. As these prices are now falling, there are plans to increase taxes again. The average price may also decrease, but less than if TICFE is at its current level. An additional 3 to 4 billion euros will enter state coffers.
07:53 – New tax on AirBnb rentals
After causing controversy a few months ago, short-term rentals, such as AirBnb, are in Michel Barnier’s sights. Global argued that the Prime Minister would have decided to remove the tax benefit that benefits owners doing such work.
Every year, the depreciation of property and services makes it possible to reduce the amount of rental income, and therefore taxes. If this does not change, all the reductions made will be added back into the calculation of the capital gain during the bin sale, which is not the case today. Sufficient to bring the amount of tax accruing to the State in the event of transfer.
06:42 – Increased tax on garbage vehicles?
In addition to big companies, Michel Barnier will focus on dirty drivers. Today, a tax of 60,000 euros is applied to vehicles that emit more than 118g of CO2 per kilometer. This threshold can drop to 106 in 2026 and 99 in 2027, and tax increases by 10,000 euros per year.
This tax applies to private vehicles (cars), passenger vehicles and “carriers” with at least 5 seats. It also applies to vehicles that have been converted -engine and which are tax-free on their first registration in France.
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